PRGN $17.57 4Q EPS $0.29 NET 7.7mil REV 30.4mil DIV 0.4375
Paragon Shipping Inc. Reports Fourth Quarter and Annual 2007 Results
Wednesday February 20, 4:30 pm ET
ATHENS, Greece, Feb. 20, 2008 (PRIME NEWSWIRE) -- Paragon Shipping Inc. (NasdaqGM:PRGN - News), a global shipping transportation company specializing in dry bulk cargoes, announced today its results for the three months and year ended December 31, 2007. The Company's results reflect the impact of its successfully completed public offering of 10,997,539 common shares (including the underwriters' partial exercise of their over allotment option), as previously announced.
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For the three months ended December 31, 2007, the Company reported net income of $7.7 million and earnings per share basic and diluted were $0.31 and $0.29, compared to net income of $0.5 million and $0.14 earnings per share basic and diluted, for the three months ended December 31, 2006.
For the full year 2007, the Company reported net income of $4.9 million and earnings per share basic and diluted were $0.12 and $0.11, compared to 2006 net income of $0.5 million and $0.14 earnings per share basic and diluted.
The Company's results for the three months and year ended December 31, 2007 include non-cash expenses of $0.3 million, or ($0.01) per basic and diluted share, and $20.2 million, or ($1.23) per basic and ($1.16) per diluted share, respectively. The non-cash expenses were related to the non-cash compensation expense resulting from the conversion of the Company's outstanding Class B common shares into Class A common shares at the time of the Company's public offering and to the amortization up to December 31, 2007, of the compensation cost recognized for the 569,500 options and a total of 105,500 restricted common shares to executive officers, directors and employees.
Other non-cash items include below market time charters attached to vessels acquired which are amortized over the remaining period of the time charter as an increase to time charter revenue, and unrealized loss from interest rate swaps. These other non-cash items contributed an aggregate of $5.1 million to net income, or $0.20 to earnings per share basic and $0.19 to earnings per share diluted for the three months ended December 31, 2007. For the year ended December 31, 2007, these items contributed $7.2 million to net income, or $0.43 and $0.41 per share, to the earnings per share basic and diluted, respectively.
Fourth Quarter 2007 Financial Results:
Time charter revenue for the fourth quarter of 2007 was $30.4 million compared to $4.9 million in the fourth quarter in 2006. The Company reported net income of $7.7 million, or $0.31 and $0.29 per basic and diluted share in the fourth quarter of 2007, calculated on 25,334,026 weighted average number of shares, basic and on 26,330,136 weighted average number of shares, diluted outstanding for the period and reflecting the impact of the non-cash items discussed above. In the fourth quarter of 2006 net income was $0.5 million, or $0.14 per basic and diluted share, calculated on 1,441,887 and 1,442,639 weighted average number of shares basic and diluted, respectively.
EBITDA was $18.0 million for the 2007 fourth quarter compared to $2.1 million for the fourth quarter in 2006. This was calculated by adding to net income of $7.7 million for the three months period ended December 31, 2007, net interest expense and depreciation that in the aggregate amounted to $10.3 million for the three months period ended December 31, 2007. Please see table at the back of this release for a reconciliation of net income to EBITDA.
The Company operated an average of 9.68 vessels during the fourth quarter of 2007, earning an average time charter equivalent rate of $35,284 per day compared to an average of 2.01 vessels during the fourth quarter of 2006, earning an average time charter equivalent rate of $25,460 per day. Total adjusted operating expenses in the fourth quarter of 2007 were $8.6 million, or approximately $9,670 per day, including vessel operating expenses and general and administrative expenses, but excluding $0.3 million of share-based compensation. In the fourth quarter of 2006, total adjusted operating expenses were $0.9 million, or approximately $4,663 per day, including vessel operating expenses and general and administrative expenses, but excluding $1.5 million of share-based compensation.
Dividend Declared
Based on the financial results for the fourth quarter of 2007, on February 12, 2008 the Board of Directors of the Company declared a quarterly dividend of $0.4375 per share, payable on February 28, 2008 to shareholders of record as of February 19, 2008. Dividends declared based on 2007 results amounted to $2.35 per share, which includes a special dividend of $0.60 per share prior to the completion of the Company's initial public offering on August 15, 2007.
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, ``We are pleased to announce to our shareholders another quarter of strong operational and financial results. During the quarter, our markets remained robust and we continued to execute on our strategic plan, further expanding our fleet through the delivery of two 2006-built Panamax drybulk carriers, and bringing our fleet total to 11 vessels with an aggregate capacity of 706,358 dwt. We also executed on our strategic chartering program. We have now locked in 93% of our voyage revenue days for 2008 and look forward with confidence to a strong year. In addition we fulfilled our commitment to our shareholders, declaring our fourth consecutive quarterly dividend of $0.4375 per share.'
Mr. Bodouroglou concluded, ``Looking forward, we believe Paragon is well positioned to take advantage of a strong drybulk market, with secular market growth drivers and little exposure to the U.S. economy. The medium-to-longer term drivers of our industry remained unchanged, and during the coming months we will be in a position to take advantage of the high demand levels we've been seeing in the market as we seek to establish new time chartering contracts for some of our assets. Our present liquidity position and strong balance sheet, in addition to our locked-in revenue for 2008, will allow us to expand our fleet further while maintaining our commitment to enhancing shareholder value.'
Time Charter Coverage Update
Pursuant to its time chartering strategy, Paragon Shipping has chartered its vessels for periods ranging from 1 to 3 years. As a result, the Company has currently fixed 93% and 50% of its available fleet days in 2008 and 2009, respectively. This represents expected contracted revenue from these charter agreements of 2007, $127.5 million and $70.0 million for 2008 and 2009, respectively. Although these charter payments are based on contractual charter rates, the contracts are subject to performance, and reflect an estimate of off-hire days for periodic or scheduled maintenance.
Recent Fleet Developments
During the fourth quarter of 2007, the Company took delivery of two vessels it contracted to acquire with borrowings under its credit facilities. With the addition of these vessels, the Company's fleet now consists of seven Panamax drybulk carriers, three Handymax drybulk carriers and one Supramax drybulk carrier, with an aggregate capacity of approximately 706,358 dwt.
The Company took delivery on November 21, 2007 of the Coral Seas, a 74,477 dwt 2006-built Panamax vessel. The Coral Seas has been chartered to Bunge S.A. pursuant to a time charter with a period of approximately 23 to 25 months at the charterer's option, at a rate of $54,000 per day, which commenced immediately upon the delivery of the vessel to the Company.
The Company also took delivery of the Golden Seas, a 74,475 dwt 2006-built Panamax vessel, on December 10, 2007. The Golden Seas has been chartered to Bunge S.A. pursuant to a time charter with a period of approximately 11 to 13 months at the charterer's option, at the rate of $64,000 per day, which commenced immediately upon delivery of the vessel.
Cash Flows
For the year ended December 31, 2007, the Company generated net cash from operating activities of $42.8 million compared to $1.6 million in the period from inception (April 26, 2006) to December 31, 2006. For the year ended December 31, 2007 net cash used in investing activities was $426.5 million and cash from financing activities was $382.7 million. For the period from inception (April 26, 2006) to December 31, 2006 net cash used in investing activities was $155.4 million and cash from financing activities was $186.1 million.
Year ended December 31, 2007 Financial Results:
Time charter revenue for the year ended December 31, 2007 was $76.7 million compared to $4.9 million in the period from inception (April 26, 2006) to December 31, 2006. The Company reported in 2007 net income of $4.9 million, or $0.12 earnings per share, basic and $0.11 earnings per share, diluted calculated on 16,495,980 weighted average number of shares, basic and 17,438,463 weighted average number of shares, diluted outstanding for the year and reflecting the impact of the non-cash expenses and other non-cash items amounting in aggregate to $13.0 million, discussed above. In 2006 net income was $0.5 million, or $0.14 per basic and diluted share, calculated on 1,441,887 and 1,442,639 weighted average number of shares basic and diluted, respectively.
EBITDA was $31.4 million for the year ended December 31, 2007 compared to $2.1 million for the period from inception (April 26, 2006) to December 31, 2006. This was calculated by adding to net income of $4.9 million for the year ended December 31, 2007, net interest expense and depreciation that in aggregate amounted to $26.5 million for the year ended December 31, 2007. Please see table at the back of this release for a reconciliation of net income to EBITDA.
The Company operated an average of 7.18 vessels during 2007, earning an average time charter equivalent rate of $28,563 per day compared to an average of 0.74 vessels during the period from inception (April 26, 2006) to December 31, 2006, earning an average time charter equivalent rate of $25,460 per day. Total adjusted operating expenses for 2007 were $18.3 million, or approximately $6,969 per day, including vessel operating expenses and general and administrative expenses, but excluding $20.2 million of share-based compensation. In 2006, total adjusted operating expenses were $0.9 million, or approximately $4,663 per day, including vessel operating expenses and general and administrative expenses, but excluding $1.5 million of share-based compensation.
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